Our website uses cookies to improve your user experience. If you continue browsing, we assume that you consent to our use of cookies. More information can be found in our Cookies Policy and Privacy Policy.

Social media and risk management

Last week, our US Editor, Meghan Keane, wrote about Andrew Hyde. Hyde is a blogger and self-described “startup enthusiast“.

A bad experience with Frontier Airlines has apparently turned him into the internet’s most vocal critic of the company. He set up @frontierair on Twitter and has even created a dedicated website to aggregate complaints about the airline. According to Hyde, Frontier Airlines is ignoring social media, and that’s a bad thing.

Whether you believe that Hyde’s complaints are valid or that he’s creating a lot of drama for no good reason, such a case study is worthy of discussion and debate. After all, before the advent of the internet, consumers had a much steeper mountain to climb in voicing their complaints publicly as Hyde has.

In this case, I made a few interesting observations:

Hyde’s post, Frontier Airlines Customer Service: “The PR Department Would Like You to Shut Up”, has only been retweeted 7 times according to the tracker on his site.

As I write this, the Econsultancy post about Hyde and Frontier Airlines has received more comments than did Hyde’s post about how he felt Frontier Air was slighting him and social media.

Even though @andrewhyde has nearly 8,000 followers, his @frontierair account only has slightly more than 250.

Hyde’s Frontier Airlines complaint aggregation site, frontierfail.com, has an Alexa traffic rank of 14,542,189, only shows 1,518 visits in November 2008 and doesn’t even register with Quantcast.

Twitter Search shows very little chatter for the phrases “frontier air” and “frontierair“.

Ironically most of the comments left here on Econsultancy have been critical of Hyde, not Frontier Airlines.

What does this mean? Well, there are two ways to evaluate the situation.

From a pure customer service and PR perspective, Hyde looks like a problem that needs to be addressed. Agree with him or not, he’s pretty upset about his experience with Frontier Air and is investing a lot of time and energy in hounding Frontier Air. No good brand manager likes to see that former customer has been turned into a vocal critic who is building negative websites, hijacking the company’s presence on popular websites, etc. The fact that a single unhappy consumer can do all this is definitely something brands should be cognizant of.

Yet from a risk management standpoint, Hyde is clearly no threat to the Frontier Airlines brand. For all of his efforts and his apparent social media prolificacy, it’s clear that his complaints are not reaching a wide enough audience to realistically have any impact on Frontier. From his website to his Twitter account, Hyde’s assault on Frontier Airlines may look bloody but there are very few soldiers on the field.

Furthermore, as evidenced by the fact that many of the comments seen here on Econsultancy questioned the validity of Hyde’s complaints, it’s clear that social media is a two-way street: it’s easy to bash a brand but when others feel that the bashing isn’t deserved, the basher can become the bashed. All without the involvement of the brand itself.

These observations lead me to the conclusion that brands need to incorporate some sort of risk management analysis into the social media decision-making matrix. Right now, far too many brands are being lulled into believing that good social media means participating in every conversation, responding to every criticism, trying to make every customer happy. The notion is that consumers are now in control and you have to do what they say. Or else.

But while the internet and social media are empowering consumers, that doesn’t mean that every vocal critic is a threat to the brand or deserving of the damage control treatment. Brands need to be strategic and logical when it comes to how they react to social media criticism.

Here are a few questions brands would be wise to ask themselves when they find themselves in a position like Frontier Airlines:

How much reach is the criticism receiving? In this case, it’s pretty clear that as vocal as Hyde is, he isn’t exactly speaking to a substantial audience.

Is the criticism deserved? Hyde was upset that Frontier changed its standby policy without telling him. But commenters defending Frontier have pointed out that the airline did provide notice and that Frontier’s policy is not substantially different from that of the airline Hyde apparently switched to.

Have you made an effort to respond reasonably? One of the comments left here on Econsultancy was from Steve Snyder of Frontier Airlines. He explained that Frontier does monitor social media outlets and tried to resolve the situation with Hyde. Furthermore, in explaining its decision to not provide customer service through Twitter as Hyde had ‘demanded‘, Snyder was admirably forthcoming: given its business model and the economic challenges it faces, Frontier feels its investments in customer service are better made elsewhere.

What are your customers looking for? Frontier is a low-cost carrier. It competes on price, not frills. You can probably pick any low-cost carrier and find plenty of horror stories, many exaggerated. Bottom line: the key factor driving a purchasing decision in Frontier’s market is price, not what you, I or Hyde says. In the aggregate, of course, a bad reputation can be very problematic, but typically a single disgruntled former customer isn’t going to tip the scale in a price sensitive market. Case in point: Wal-Mart. For all of the criticism it has received over the years from consumers and media alike on a variety of important topics from hiring practices to overseas labor, it’s thriving.

Armed with answers to questions like those above, brands can evaluate what sort of risk a situation poses. That will determine what sort of investment in a response is appropriate. In this case, since Hyde’s complaints are reaching what amounts to an inconsequential audience of questionable receptiveness and the complaints themselves are of questionable validity, Hyde really isn’t a risk to Frontier Airlines and the company made a wise decision to ignore him after it became clear that reasonable efforts to placate him weren’t going anywhere.

As Snyder wrote in his comment, “sometimes you can’t completely satisfy everybody“.

In the final analysis, managing social media is a lot like managing an investment portfolio. If you have a $100m portfolio, you’d be foolish to overmanage the risk on a $5,000 position to the detriment of your other, larger positions. Companies should keep this in mind when it comes to managing the portfolio that is their brand, as oftentimes the most critical voices in the social mediasphere are those $5,000 positions.

For the past 25 years, the annual TED conference has brought together people from the worlds of technology, entertainment, and design. With a focus on spreading ideas and making change, TED has worked with such names as Bill Gates, Al Gore, Jane Goodall, Philippe Starck, and Bono, to become a world renowned leader in ideas and innovation.

For the past three years, TED has worked with a small group of
marketers to bring their specialized 18-minute TED talks online for free. Last month, they announced they are opening up
their roster of sponsors.

Brands in search of a positive image can’t do much better than TED, with its impressively positive brand recognition and audience target (one in five TED.com members is the CEO, owner or principal of their
company).

We caught up with Ronda Carnegie, TED’s Global Partnership Director, to discuss the benefits and burdens of TED’s good reputation and how a group like TED will factor into the future of creative paid content.

London-based startup Songkick has just launched its social network for gig-goers, which lists a million gigs, new and old.

The Songkick site is a database of concerts and tour histories crawled from around the web, so users can not only see upcoming gigs, but add pictures, ticket stubs, and review and reminisce about their favourite concerts.

Companies are pouring billions of dollars a year into social media and influencer marketing campaigns, many of which target consumers on Facebook-owned Instagram, in an effort to parlay social engagement into sales.